Tax credit up for vote in Hartville

Issue 28 in Hartville seeks to reinstate a tax credit that village council ended last year. With the credit, residents who pay a local income tax to another municipality would be exempt from the village’s 1 percent income tax.

Village voters will have their say on council’s decision last year to end an exemption for residents who pay local income tax to other municipalities.

Issue 28 asks voters to reinstate the tax credit.

Former Mayor Beverly Green, who petitioned to get the issue on the ballot, said she objected to council’s using an emergency measure to end the tax credit, saying it did not give voters enough time to comment on the issue.

“I just didn’t feel that was correct,” Green said. “If you’re going to impose taxes, you should give people a voice in it.”

The village administration says it ended the exemption because it needs the estimated $310,000 to maintain existing services and raise funds for capital projects, such as street repairs.

Residents, individuals who work in the village and businesses have paid a 1 percent income tax in Hartville since 1969. But, until last year, if residents paid local income tax to another municipality, they didn’t have to pay the village.

Council voted 4-1 in August 2012 to eliminate the tax credit. The ordinance took effect in January.

During the last five years, income tax revenue accounted for about $919,000 of the village’s roughly $1.5 million general fund, which pays for municipal operations, maintenance, new equipment and capital improvements.

UPCOMING EXPENSES

Mayor Richard A. Currie said Hartville needs the money because of decreases in state funding for local government, the loss of jobs in the village and greater demand for services.

“If the credit is reinstated, we’ll just be farther behind than where we are now,” Currie said.

The mayor projects a number of village expenses in the coming years:

• $250,000 a year for five years to repair and maintain streets and alleys;

• $25,000 a year for five years to replace police cruisers;

• $32,400 a year for 20 years to put the Police Department in new offices;

• a 2 percent raise for 15 full-time village employees who haven’t had a raise since April 2011;

• $250,000 for a new pickup, backhoe and dump truck for the Street Department;

• $46,650 to replace carpet, the roof and heating and air conditioning equipment at Village Hall that is more than 20 years old.

“We think these are things the village really needs to do,” Currie said.

The village expects to need an extra $200,000 a year — above what it collects from ending the exemption — to cover those anticipated costs. Currie said the village likely will need to ask voters to increase the tax rate at some point.

Green said the village should first go after individuals who haven’t filed their tax returns or haven’t paid the tax, as well as cut back on spending.

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“If you don’t have the money, you shouldn’t be spending,” she said.

Currie said the village is pursuing unpaid taxes, has identified some 500 persons who haven’t filed returns and is contracting with the city of Cleveland to access federal tax returns, to see if there are others who haven’t filed and what might be owed.